AMC Theatres has reached a formal agreement with Warner Bros. to show the studio’s 2022 slate on the big screen for an exclusive 45-day window.
The news is not surprising, because Warner Bros. has had a similar plan in place with Cineworld, the owner of Regal Cinemas, since April. However, the announcement is comforting to film operators, who feared the pandemic would spell the end of the theatrical window, the period of time in which movies are only available in theaters. Many of the biggest movies released since the onset of COVID-19 premiered simultaneously on streaming services, such as HBO Max and Disney Plus, which is a deviation from pre-plague times.
In the company’s quarterly earnings call, AMC announced that by the end of the year, it will accept bitcoin payments for tickets and concessions. The company is also building the technology to accept Apple Pay and Google Pay by 2022. The move to embrace cryptocurrency is a nod to the new base of younger retail investors that AMC has attracted in recent months as it has been embraced as a meme stock. The company’s shares have surged, propelled by populist sentiment rather than financial data. As a nod to this new reality, AMC shook up its earnings call, choosing to answer questions from its broader investor base and only sparing a few minutes for the analysts who closely follow the company.
Some of AMC CEO Adam Aron’s remarks seemed tailored to excite his new shareholders, as when he floated the idea that the exhibitor might partner with GameStop to host events for gamers. GameStop has also seen its shares surge as investors have taken up its cause, bought shares and beaten back short-sellers.
“We’re on the case,” Aron said. “More to come.” Later, he noted that “it takes two to tango” and said that although AMC has yet to reach out to the company, “we intend to do so.”
Armed with fresh capital, Aron said AMC was going back on the offensive. He said the company could add at least 10 new venues to its circuit, eight of which are leases formerly operated by Pacific Theaters. Last month, AMC took over two of the shuttered chain’s most popular venues, The Grove in Los Angeles and Americana at Brand in Glendale. The new locations include other California venues, as well as theaters in Chicago and Atlanta.
Aron said it’s “no secret that AMC was not happy” when Warner Bros. announced all of its 2021 movies, a slate that ranges from “Space Jam: A New Legacy” and “Dune” to “The Matrix 4,” would premiere simultaneously on HBO Max, the company’s budding streaming service. Executives at Warner Bros. maintained it was a “one year” concession to the pandemic, and that the studio would return to keeping its movies exclusively in theaters in 2022.
“It’s especially gratifying that Warner Bros is yet again embracing a theatrical window,” Aron said. “For us at AMC, it’s especially pleasing to be working so harmoniously with Warner Bros. once again.”
Aron added, “We’re in active dialogue with every major studio on this topic. We’re hearing considerable support that an exclusive theatrical window is an important way to build a successful movie franchise.”
It’s been a trying time for the movie theater business, which has been struggling to reemerge from the pandemic. So far, the domestic box office has been a mixed bag with COVID-era hits like “A Quiet Place Part II” and “F9: The Fast Saga,” as well as commercial disappointments such as “Snake Eyes” and “Space Jam: A New Legacy.”
At the onset of the public health crisis, AMC was forced to close all of its locations across the globe and lay off or furlough thousands of employees. As COVID-19 raged on, the company appeared to be on the brink of bankruptcy at several points. However, AMC was able to survive by renegotiating its debt. For months, AMC has also benefitted from the internet frenzy around its status as a “meme stock,” which propelled its stock price to an all-time high.
In the second quarter of 2021, AMC has seen improvements, with revenues hitting $444.7 million, up from $18.9 million in the year-ago period. At the same time, its losses shrank: AMC recorded a net loss of $344 million, down from the $561.2 million in losses in the same frame in 2020. The exhibition company had a net loss of 71 cents per share, an improvement on the $5.38 per share from the same time last year.
The theater sector has suffered some setbacks. Recent releases like “The Suicide Squad” and “Jungle Cruise” have debuted to underwhelming results and consumer confidence is shaky due to the spread of the delta variant. Aron acknowledged that public health experts believe that the virus will see another rise in cases in the winter, but he predicted that the increase in vaccination rates will ensure that the movie business doesn’t see a decline in popularity.
“We won’t see the kind of lockdown of society this winter that we saw last winter,” he predicted.